Patent Law FAQ
This FAQ answers all your questions about patent law, patent procedure, and the patent examination process.
Here’s the complete FAQ:
MPEP 500 - Receipt and Handling of Mail and Papers (34)
For the purpose of micro entity status, the following types of patent applications count towards the application filing limit:
- Previously filed U.S. nonprovisional applications (utility, design, plant, continuation, and divisional)
- Previously filed U.S. reissue applications
- Previously filed U.S. national stage applications under the Patent Cooperation Treaty (PCT)
- Previously filed international design applications under the Hague agreement that designate the U.S.
The MPEP states: “All such applications naming the inventor or a joint inventor are counted toward the application filing limit, whether the applications were filed before, on, or after March 19, 2013.“
Applications that do not count towards the limit include:
- Foreign applications
- International (PCT) applications for which the basic U.S. national stage filing fee was not paid
- Provisional applications
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What is the limit on the number of previously filed patent applications for micro entity status?
For micro entity status, an applicant must not have been named as an inventor on more than four previously filed patent applications. The MPEP states:
“The applicant has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111(b), or international applications for which the basic national fee under 35 U.S.C. 41(a) was not paid.”
This limit helps ensure that micro entity status is reserved for truly small-scale inventors or businesses. It’s important to note that certain types of applications, such as provisional applications and international applications where the basic national fee wasn’t paid, don’t count towards this limit.
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The institution of higher education basis allows applicants to qualify for micro entity status if:
- The applicant’s employer, from which the applicant obtains the majority of their income, is an institution of higher education as defined in the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is obligated to assign, grant or convey, a license or ownership interest in the application to such an institution of higher education.
The applicant must also qualify as a small entity. This basis is implemented in 37 CFR 1.29(d).
According to 37 CFR 1.29(k)(1), the itemization for a micro entity fee deficiency payment must include:
- Each type of fee erroneously paid as a micro entity
- The current fee amount for a small or non-small entity
- The micro entity fee actually paid and the date of payment
- The deficiency owed amount for each fee
- The total deficiency payment owed
The MPEP specifies: The paper must contain an itemization of the total deficiency payment and include the following information: (1) each particular type of fee that was erroneously paid as a micro entity, (e.g., basic statutory filing fee, two-month extension of time fee) along with the current fee amount for a small or non-small entity; (2) the micro entity fee actually paid, and the date on which it was paid; (3) the deficiency owed amount (for each fee erroneously paid); and (4) the total deficiency payment owed, which is the sum or total of the individual deficiency owed amounts.
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What happens if I lose micro entity status during the patent process?
If you lose micro entity status during the patent process, you must notify the USPTO promptly. The MPEP states:
“A micro entity that no longer meets the requirements for micro entity status at a point in time when a fee is due is treated as a small entity for purposes of paying the fee if the applicant or patentee is otherwise eligible for small entity status.”
This means:
- You must file a notification of loss of entitlement to micro entity status.
- If you still qualify as a small entity, you can pay fees at the small entity rate.
- If you no longer qualify as a small entity, you must pay fees at the standard (large entity) rate.
It’s important to note that continuing to pay fees at the micro entity rate when you no longer qualify can result in the patent being held unenforceable. For more details, refer to MPEP 509.04(e).
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If you lose entitlement to micro entity status, you must:
- File a notification of loss of entitlement to micro entity status in the application or patent
- Pay the required fee in the small entity or undiscounted amount, as appropriate
The notification must be filed prior to or at the time of paying the earliest fee after the date on which status as a micro entity is no longer appropriate. As stated in 37 CFR 1.29(i): ‘Payment of a fee in other than the micro entity amount is not sufficient notification that micro entity status is no longer appropriate.’
If you fail to comply with the requirements for correcting micro entity status errors, as outlined in 37 CFR 1.29(k)(1) and (k)(2), the USPTO has two options:
- Treat it as an authorization to process the deficiency payment and charge a processing fee
- Require compliance within a non-extendable one-month period
The MPEP states: If the requirements of paragraphs (k)(1) and (2) of this section are not complied with, such failure will either be treated at the option of the Office as an authorization for the Office to process the deficiency payment and charge the processing fee set forth in § 1.17(i), or result in a requirement for compliance within a one-month time period that is not extendable under § 1.136(a) to avoid the return of the fee deficiency payment.
It’s important to carefully follow the requirements to avoid additional fees or potential loss of rights.
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Micro entities receive a 75% reduction on many USPTO fees, including:
- Filing fees (nonprovisional and provisional)
- Search fees
- Examination fees
- Issue fees
- Appeal fees
- Maintenance fees
- Patent Trial and Appeal Board fees
The micro entity discount applies to most fees ‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.’
Improperly claiming micro entity status can have serious consequences:
- It may be considered fraud on the USPTO if done knowingly
- It can result in the patent being held unenforceable
- Improperly paid fees will need to be corrected, which may include late fees
MPEP 509.04 warns: ‘Any attempt to fraudulently establish status as a micro entity, or pay fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office. Improperly, and with intent to deceive, establishing status as a micro entity, or paying fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office.’
To qualify for micro entity status, an applicant must meet the following requirements:
- Qualify as a small entity
- Not be named as an inventor on more than 4 previously filed patent applications
- Not have a gross income exceeding 3 times the median household income in the previous calendar year
- Not have assigned, licensed, or be obligated to assign or license rights to an entity that exceeds the gross income limit
Alternatively, an applicant can qualify if they are employed by or have assigned rights to an institution of higher education.
To establish micro entity status on the gross income basis, an applicant must meet the following requirements as outlined in 37 CFR 1.29(a)(1)-(4):
- Qualify as a small entity
- Not have been named as an inventor on more than four previously filed patent applications
- Not have a gross income exceeding three times the median household income in the preceding calendar year
- Not have assigned, granted, or conveyed, and not be under an obligation to do so, a license or ownership interest to an entity exceeding the gross income limit
The MPEP states: “Because each inventor and each non-inventor applicant (e.g., assignee-applicant) must separately meet the requirements under 37 CFR 1.29(a)(1)-(4), it would not be appropriate to file a micro entity certification under 37 CFR 1.29(a) for the application if there were more than one applicant or inventor and not all of the applicants and inventors qualified as micro entities under 35 U.S.C. 123(a).“
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To establish micro entity status based on an institution of higher education, an applicant must meet two main requirements:
- Qualify as a small entity as defined in 37 CFR 1.27
- Meet one of the following criteria:
- The applicant’s employer, from which they obtain the majority of their income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is under an obligation to assign, grant, or convey, a license or other ownership interest in the application to such an institution of higher education.
As stated in MPEP 509.04(b): “An applicant for micro entity status under the ‘institution of higher education’ basis set forth in 37 CFR 1.29(d) must satisfy two requirements.”
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What are the income limitations for qualifying as a micro entity?
To qualify as a micro entity based on income, an applicant’s gross income in the previous calendar year must not exceed three times the median household income as reported by the Bureau of the Census. The MPEP states:
“The income limit is not described in terms of a specific dollar amount because median household income may change from year to year.” (MPEP 509.04(a))
For the most current income threshold, applicants should check the USPTO’s website or consult with a patent attorney. It’s important to note that this limit applies to each applicant, inventor, and joint inventor who is named in the application.
To learn more:
What are the income limitations for micro entity status?
To qualify for micro entity status, an applicant’s income must not exceed three times the median household income as reported by the Bureau of the Census. According to USPTO’s 2022 notice, the income limit is $206,109. The MPEP states:
“[A]n applicant qualifies as a micro entity if the applicant’s gross income in the previous calendar year does not exceed the ‘maximum qualifying gross income’ which is set to three times the median household income as reported by the Bureau of the Census.” (MPEP 509.04(a))
It’s important to note that this limit is subject to change, and applicants should check the latest USPTO notices for the most current information.
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Micro entity status, once properly established, generally remains in effect until:
- A fee is paid in the small entity or undiscounted amount
- A notification of loss of entitlement to micro entity status is filed
- The issue fee or a maintenance fee is due
However, the applicant has a continued obligation to verify eligibility for micro entity status each time a fee is paid. As stated in 37 CFR 1.29(g): ‘a fee may be paid in the micro entity amount only if status as a micro entity as defined in paragraph (a) or (d) of this section is appropriate on the date the fee is being paid.’
The gross income limit for micro entity status is determined as follows:
- It is set at three times the median household income for the preceding calendar year, as reported by the Bureau of the Census.
- The USPTO publishes the current maximum qualifying gross income on their website.
- This limit applies to each applicant, inventor, and joint inventor individually.
The MPEP clarifies: “At the time any fee is to be paid in the micro entity amount, it is required that no inventor and no non-inventor applicant (if any) have a preceding calendar year’s gross income exceeding the ‘maximum qualifying gross income’ posted on the USPTO website.“
It’s important to note that gross income means total income, not adjusted gross income. The MPEP states: “‘Gross income’ and ‘adjusted gross income’ are not the same thing. Adjusted gross income is defined as gross income minus adjustments to income. For purposes of micro entity status it is ‘gross income’ – not ‘adjusted gross income’ that matters.“
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The deficiency owed for micro entity fee errors is calculated according to 37 CFR 1.29(k)(2). The MPEP states:
The deficiency owed for each previous fee erroneously paid as a micro entity is the difference between the current fee amount for a small entity or non-small entity, as applicable, on the date the deficiency is paid in full and the amount of the previous erroneous micro entity fee payment.
To calculate the total deficiency payment:
- Determine the current fee amount for each erroneously paid fee (small or non-small entity rate)
- Subtract the micro entity fee amount previously paid
- Sum up all individual deficiency amounts
This calculation ensures that the correct fee amount is paid based on the entity status and current fee schedule.
To learn more:
For micro entity status, gross income is determined as follows:
- Based on the calendar year preceding the year a fee is paid
- Uses the definition of gross income in section 61(a) of the Internal Revenue Code
- Compared to three times the median household income as reported by the Bureau of the Census
- For non-US income, converted using the average currency exchange rate for the relevant calendar year
The USPTO website provides the current maximum qualifying gross income limit.
When calculating gross income for micro entity status involving foreign currency, the USPTO provides specific guidelines:
- If an applicant’s, inventor’s, or entity’s gross income in the preceding calendar year is not in U.S. dollars, the average currency exchange rate reported by the Internal Revenue Service (IRS) for that calendar year must be used for conversion.
- For income received partially in U.S. dollars and partially in foreign currency, the foreign portion must be converted to U.S. dollars and added to the U.S. dollar amount.
The MPEP states: “If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in 37 CFR 1.29(a)(3) or (a)(4).“
The IRS provides yearly average currency exchange rates on its website, which should be used for these calculations.
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An ‘institution of higher education’ for micro entity status purposes is defined according to Section 101(a) of the Higher Education Act of 1965. The key criteria include:
- Located in any U.S. state or territory
- Admits students with secondary education or equivalent
- Authorized to provide post-secondary education
- Offers bachelor’s degrees or at least 2-year programs toward such degrees
- Is a public or non-profit institution
- Is accredited or pre-accredited by a recognized agency
As stated in MPEP 509.04(b): “Section 101(a) of the Higher Education Act of 1965 defines what is meant by ‘institution of higher education’ in the context of 37 CFR 1.29(d).”
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The application filing limit for micro entity status works as follows:
- An applicant must not have been named as an inventor on more than 4 previously filed patent applications
- This limit excludes provisional applications, foreign applications, and PCT applications where the basic national fee was not paid
- Applications filed as a result of previous employment where rights were assigned don’t count towards the limit
MPEP 509.04(a) clarifies: ‘It does not matter how long ago the previous applications were filed or whether the previously filed applications are pending, patented, or abandoned; they are still included when counting to determine whether the application filing limit has been reached.’
How does licensing affect micro entity status eligibility?
Licensing can significantly impact an applicant’s eligibility for micro entity status. According to the MPEP:
“The applicant has not assigned, granted, or conveyed, nor is under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census.”
This means that if you’ve licensed or are obligated to license your application to a high-income entity (exceeding 3 times the median household income), you may not be eligible for micro entity status. It’s crucial to consider any existing or potential licensing agreements when determining your eligibility.
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How does employment at an institution of higher education affect micro entity status?
Employment at an institution of higher education can provide a pathway to micro entity status. The MPEP states:
“A micro entity shall also include an applicant who certifies that: (1) The applicant’s employer, from which the applicant obtains the majority of the applicant’s income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); or (2) The applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular application to such an institution of higher education.” (MPEP 509.04(d))
This means that if you are employed by a qualifying institution of higher education and receive the majority of your income from it, or if you have assigned or are obligated to assign your rights in the application to such an institution, you may be eligible for micro entity status. This provision can be particularly beneficial for academic researchers and inventors.
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How does employment affect micro entity status for inventors?
An inventor’s employment can significantly impact their eligibility for micro entity status. The MPEP provides specific guidelines:
“[A]n applicant is not considered to be named on more than four previously filed patent applications if the applicant has assigned, or is under an obligation to assign, all ownership rights in the applications as the result of the applicant’s previous employment.” (MPEP 509.04(a))
This means that if an inventor has previously filed patent applications as part of their job, and they have assigned or are obligated to assign the rights to their employer, these applications don’t count towards the four-application limit for micro entity status. However, it’s crucial to note that:
- The inventor must not be currently named as an inventor on more than four non-provisional patent applications.
- The inventor’s current employer must not be considered a non-micro entity.
Inventors should carefully evaluate their employment situation and patent history when determining their eligibility for micro entity status.
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Assigning ownership rights can significantly affect micro entity status. The MPEP provides the following guidance:
- An applicant is disqualified from micro entity status if they transfer, or are obligated to transfer, any ownership interest to an entity that exceeds the gross income limit.
- If an inventor assigns all rights to an employer that exceeds the gross income limit, micro entity status cannot be claimed.
- Even if rights are later transferred back to the inventor or to another person who doesn’t exceed the gross income limit, micro entity status cannot be regained.
The MPEP states: “Once an assignee or licensee exceeding the gross income limit receives the ownership interest, the 37 CFR 1.29(a)(4) certification requirement can no longer be met – even if the assignee or licensee retransfers rights and no longer holds any ownership interest in the application.“
It’s important to note that this applies to both actual transfers and obligations to transfer ownership rights.
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To certify micro entity status, you must file a certification form with the USPTO. The USPTO provides two forms:
- Form PTO/SB/15A for certifying under the gross income basis
- Form PTO/SB/15B for certifying under the institution of higher education basis
The certification must be signed by an authorized party as defined in 37 CFR 1.33(b). It should be filed prior to or at the time of paying the first fee as a micro entity.
To correct an error in micro entity status, you need to follow the procedure outlined in 37 CFR 1.29(k). This involves:
- Submitting a separate deficiency payment for each application or patent
- Providing an itemization of the total deficiency payment
- Paying the deficiency owed
The MPEP states: 37 CFR 1.29(k) contains provisions for a micro entity that correspond to the provisions of 37 CFR 1.28(c) for a small entity.
This means the process is similar to correcting small entity status errors.
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Yes, submitting a deficiency payment for micro entity fee errors affects your micro entity status. According to 37 CFR 1.29(k)(4):
Any deficiency payment (based on a previous erroneous payment of a micro entity fee) submitted under this paragraph will be treated as a notification of a loss of entitlement to micro entity status under paragraph (i) of this section.
This means that by submitting a deficiency payment, you are effectively notifying the USPTO that you are no longer entitled to micro entity status. After making the deficiency payment, you will need to pay fees at the small entity or non-small entity rate, as applicable, unless you file a new certification of micro entity status.
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No, you cannot correct micro entity status errors for multiple applications or patents in a single submission. The MPEP, citing 37 CFR 1.29(k)(1), states:
Any paper submitted under this paragraph must be limited to the deficiency payment (all fees paid in error) required for a single application or patent. Where more than one application or patent is involved, separate submissions of deficiency payments are required for each application or patent (see § 1.4(b)).
This means you must submit separate deficiency payments and itemizations for each application or patent where micro entity fees were erroneously paid. This requirement ensures clear and accurate processing of fee corrections for each individual case.
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Yes, foreign applicants can qualify for micro entity status if they meet all the requirements. The USPTO states in MPEP 509.04(a):
Small entities may claim reduced fees regardless of the country in which they are located. There is no restriction requiring that the person, small business concern, or nonprofit organization be located in the United States.
For applicants with income in foreign currency, 37 CFR 1.29(c) specifies: ‘If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in paragraph (a)(3) or (4) of this section.’
Can an applicant with a license agreement qualify for micro entity status?
Yes, an applicant with a license agreement can potentially qualify for micro entity status, but there are specific conditions that must be met. The MPEP provides guidance on this:
“An applicant is not considered to have been named on a previously filed application if the applicant has assigned, or is under an obligation to assign, all ownership rights in the application as the result of the applicant’s previous employment.” (MPEP 509.04(a))
However, it’s important to note that:
- The license agreement must not transfer all substantial rights in the invention to a non-micro entity.
- If the licensee is not a micro entity, the applicant may lose their micro entity status.
- The applicant must still meet all other micro entity criteria, including income limitations and the four-application limit.
Applicants with license agreements should carefully review the terms of their agreements and consult with a patent attorney to determine if they still qualify for micro entity status.
To learn more:
Can an applicant claim micro entity status based on income from a foreign country?
Yes, an applicant can claim micro entity status based on income from a foreign country. The MPEP clarifies:
“For purposes of qualifying for micro entity status based on the gross income limit, the gross income in the foreign currency must be converted into United States dollars at the exchange rate in effect on the date the micro entity certification is filed.”
This means that if you’re an applicant from a foreign country, you can still qualify for micro entity status if your income, when converted to U.S. dollars, does not exceed the gross income limit. It’s important to use the correct exchange rate on the date of filing your micro entity certification to ensure accurate calculation.
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Can a small business qualify for micro entity status?
Yes, a small business can potentially qualify for micro entity status, but there are specific requirements to meet. The MPEP outlines two main paths for small businesses:
- Income-based qualification: If the small business’s income does not exceed three times the median household income in the preceding calendar year, it may qualify.
- Institution of higher education qualification: If the small business has assigned, granted, conveyed, or is under obligation to assign, grant, or convey a license or other ownership interest in the application to an institution of higher education.
The MPEP states:
“An applicant that qualifies as a micro entity under either the gross income basis or the institution of higher education basis can file a certification of micro entity status on either basis (but not both).”
It’s important to note that all parties involved (applicants, inventors, and joint inventors) must meet the requirements. For more details, refer to MPEP 509.04.
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Are there any fee reductions or waivers available for USPTO patent fees?
Yes, the USPTO offers fee reductions for certain applicants. According to MPEP 509, “Certain fees may be reduced if the applicant qualifies as a small entity or micro entity.” Here’s a brief overview:
- Small Entity: Individuals, small businesses, and nonprofit organizations may qualify for a 50% fee reduction.
- Micro Entity: Certain applicants may qualify for a 75% fee reduction if they meet specific income and filing requirements.
To determine if you qualify and for detailed information on how to claim these statuses, refer to MPEP 509.02 for Small Entity Status and MPEP 509.04 for Micro Entity Status. Always ensure you meet all requirements before claiming a reduced fee status.
To learn more:
MPEP 509 - Payment of Fees (11)
The institution of higher education basis allows applicants to qualify for micro entity status if:
- The applicant’s employer, from which the applicant obtains the majority of their income, is an institution of higher education as defined in the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is obligated to assign, grant or convey, a license or ownership interest in the application to such an institution of higher education.
The applicant must also qualify as a small entity. This basis is implemented in 37 CFR 1.29(d).
If you lose entitlement to micro entity status, you must:
- File a notification of loss of entitlement to micro entity status in the application or patent
- Pay the required fee in the small entity or undiscounted amount, as appropriate
The notification must be filed prior to or at the time of paying the earliest fee after the date on which status as a micro entity is no longer appropriate. As stated in 37 CFR 1.29(i): ‘Payment of a fee in other than the micro entity amount is not sufficient notification that micro entity status is no longer appropriate.’
Micro entities receive a 75% reduction on many USPTO fees, including:
- Filing fees (nonprovisional and provisional)
- Search fees
- Examination fees
- Issue fees
- Appeal fees
- Maintenance fees
- Patent Trial and Appeal Board fees
The micro entity discount applies to most fees ‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.’
Improperly claiming micro entity status can have serious consequences:
- It may be considered fraud on the USPTO if done knowingly
- It can result in the patent being held unenforceable
- Improperly paid fees will need to be corrected, which may include late fees
MPEP 509.04 warns: ‘Any attempt to fraudulently establish status as a micro entity, or pay fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office. Improperly, and with intent to deceive, establishing status as a micro entity, or paying fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office.’
To qualify for micro entity status, an applicant must meet the following requirements:
- Qualify as a small entity
- Not be named as an inventor on more than 4 previously filed patent applications
- Not have a gross income exceeding 3 times the median household income in the previous calendar year
- Not have assigned, licensed, or be obligated to assign or license rights to an entity that exceeds the gross income limit
Alternatively, an applicant can qualify if they are employed by or have assigned rights to an institution of higher education.
Micro entity status, once properly established, generally remains in effect until:
- A fee is paid in the small entity or undiscounted amount
- A notification of loss of entitlement to micro entity status is filed
- The issue fee or a maintenance fee is due
However, the applicant has a continued obligation to verify eligibility for micro entity status each time a fee is paid. As stated in 37 CFR 1.29(g): ‘a fee may be paid in the micro entity amount only if status as a micro entity as defined in paragraph (a) or (d) of this section is appropriate on the date the fee is being paid.’
For micro entity status, gross income is determined as follows:
- Based on the calendar year preceding the year a fee is paid
- Uses the definition of gross income in section 61(a) of the Internal Revenue Code
- Compared to three times the median household income as reported by the Bureau of the Census
- For non-US income, converted using the average currency exchange rate for the relevant calendar year
The USPTO website provides the current maximum qualifying gross income limit.
The application filing limit for micro entity status works as follows:
- An applicant must not have been named as an inventor on more than 4 previously filed patent applications
- This limit excludes provisional applications, foreign applications, and PCT applications where the basic national fee was not paid
- Applications filed as a result of previous employment where rights were assigned don’t count towards the limit
MPEP 509.04(a) clarifies: ‘It does not matter how long ago the previous applications were filed or whether the previously filed applications are pending, patented, or abandoned; they are still included when counting to determine whether the application filing limit has been reached.’
To certify micro entity status, you must file a certification form with the USPTO. The USPTO provides two forms:
- Form PTO/SB/15A for certifying under the gross income basis
- Form PTO/SB/15B for certifying under the institution of higher education basis
The certification must be signed by an authorized party as defined in 37 CFR 1.33(b). It should be filed prior to or at the time of paying the first fee as a micro entity.
Yes, foreign applicants can qualify for micro entity status if they meet all the requirements. The USPTO states in MPEP 509.04(a):
Small entities may claim reduced fees regardless of the country in which they are located. There is no restriction requiring that the person, small business concern, or nonprofit organization be located in the United States.
For applicants with income in foreign currency, 37 CFR 1.29(c) specifies: ‘If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in paragraph (a)(3) or (4) of this section.’
Are there any fee reductions or waivers available for USPTO patent fees?
Yes, the USPTO offers fee reductions for certain applicants. According to MPEP 509, “Certain fees may be reduced if the applicant qualifies as a small entity or micro entity.” Here’s a brief overview:
- Small Entity: Individuals, small businesses, and nonprofit organizations may qualify for a 50% fee reduction.
- Micro Entity: Certain applicants may qualify for a 75% fee reduction if they meet specific income and filing requirements.
To determine if you qualify and for detailed information on how to claim these statuses, refer to MPEP 509.02 for Small Entity Status and MPEP 509.04 for Micro Entity Status. Always ensure you meet all requirements before claiming a reduced fee status.
To learn more:
Patent Law (35)
For the purpose of micro entity status, the following types of patent applications count towards the application filing limit:
- Previously filed U.S. nonprovisional applications (utility, design, plant, continuation, and divisional)
- Previously filed U.S. reissue applications
- Previously filed U.S. national stage applications under the Patent Cooperation Treaty (PCT)
- Previously filed international design applications under the Hague agreement that designate the U.S.
The MPEP states: “All such applications naming the inventor or a joint inventor are counted toward the application filing limit, whether the applications were filed before, on, or after March 19, 2013.“
Applications that do not count towards the limit include:
- Foreign applications
- International (PCT) applications for which the basic U.S. national stage filing fee was not paid
- Provisional applications
To learn more:
What is the limit on the number of previously filed patent applications for micro entity status?
For micro entity status, an applicant must not have been named as an inventor on more than four previously filed patent applications. The MPEP states:
“The applicant has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111(b), or international applications for which the basic national fee under 35 U.S.C. 41(a) was not paid.”
This limit helps ensure that micro entity status is reserved for truly small-scale inventors or businesses. It’s important to note that certain types of applications, such as provisional applications and international applications where the basic national fee wasn’t paid, don’t count towards this limit.
To learn more:
The institution of higher education basis allows applicants to qualify for micro entity status if:
- The applicant’s employer, from which the applicant obtains the majority of their income, is an institution of higher education as defined in the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is obligated to assign, grant or convey, a license or ownership interest in the application to such an institution of higher education.
The applicant must also qualify as a small entity. This basis is implemented in 37 CFR 1.29(d).
According to 37 CFR 1.29(k)(1), the itemization for a micro entity fee deficiency payment must include:
- Each type of fee erroneously paid as a micro entity
- The current fee amount for a small or non-small entity
- The micro entity fee actually paid and the date of payment
- The deficiency owed amount for each fee
- The total deficiency payment owed
The MPEP specifies: The paper must contain an itemization of the total deficiency payment and include the following information: (1) each particular type of fee that was erroneously paid as a micro entity, (e.g., basic statutory filing fee, two-month extension of time fee) along with the current fee amount for a small or non-small entity; (2) the micro entity fee actually paid, and the date on which it was paid; (3) the deficiency owed amount (for each fee erroneously paid); and (4) the total deficiency payment owed, which is the sum or total of the individual deficiency owed amounts.
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What happens if I lose micro entity status during the patent process?
If you lose micro entity status during the patent process, you must notify the USPTO promptly. The MPEP states:
“A micro entity that no longer meets the requirements for micro entity status at a point in time when a fee is due is treated as a small entity for purposes of paying the fee if the applicant or patentee is otherwise eligible for small entity status.”
This means:
- You must file a notification of loss of entitlement to micro entity status.
- If you still qualify as a small entity, you can pay fees at the small entity rate.
- If you no longer qualify as a small entity, you must pay fees at the standard (large entity) rate.
It’s important to note that continuing to pay fees at the micro entity rate when you no longer qualify can result in the patent being held unenforceable. For more details, refer to MPEP 509.04(e).
To learn more:
If you lose entitlement to micro entity status, you must:
- File a notification of loss of entitlement to micro entity status in the application or patent
- Pay the required fee in the small entity or undiscounted amount, as appropriate
The notification must be filed prior to or at the time of paying the earliest fee after the date on which status as a micro entity is no longer appropriate. As stated in 37 CFR 1.29(i): ‘Payment of a fee in other than the micro entity amount is not sufficient notification that micro entity status is no longer appropriate.’
If you fail to comply with the requirements for correcting micro entity status errors, as outlined in 37 CFR 1.29(k)(1) and (k)(2), the USPTO has two options:
- Treat it as an authorization to process the deficiency payment and charge a processing fee
- Require compliance within a non-extendable one-month period
The MPEP states: If the requirements of paragraphs (k)(1) and (2) of this section are not complied with, such failure will either be treated at the option of the Office as an authorization for the Office to process the deficiency payment and charge the processing fee set forth in § 1.17(i), or result in a requirement for compliance within a one-month time period that is not extendable under § 1.136(a) to avoid the return of the fee deficiency payment.
It’s important to carefully follow the requirements to avoid additional fees or potential loss of rights.
To learn more:
Micro entities receive a 75% reduction on many USPTO fees, including:
- Filing fees (nonprovisional and provisional)
- Search fees
- Examination fees
- Issue fees
- Appeal fees
- Maintenance fees
- Patent Trial and Appeal Board fees
The micro entity discount applies to most fees ‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.’
Improperly claiming micro entity status can have serious consequences:
- It may be considered fraud on the USPTO if done knowingly
- It can result in the patent being held unenforceable
- Improperly paid fees will need to be corrected, which may include late fees
MPEP 509.04 warns: ‘Any attempt to fraudulently establish status as a micro entity, or pay fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office. Improperly, and with intent to deceive, establishing status as a micro entity, or paying fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office.’
To qualify for micro entity status, an applicant must meet the following requirements:
- Qualify as a small entity
- Not be named as an inventor on more than 4 previously filed patent applications
- Not have a gross income exceeding 3 times the median household income in the previous calendar year
- Not have assigned, licensed, or be obligated to assign or license rights to an entity that exceeds the gross income limit
Alternatively, an applicant can qualify if they are employed by or have assigned rights to an institution of higher education.
To establish micro entity status on the gross income basis, an applicant must meet the following requirements as outlined in 37 CFR 1.29(a)(1)-(4):
- Qualify as a small entity
- Not have been named as an inventor on more than four previously filed patent applications
- Not have a gross income exceeding three times the median household income in the preceding calendar year
- Not have assigned, granted, or conveyed, and not be under an obligation to do so, a license or ownership interest to an entity exceeding the gross income limit
The MPEP states: “Because each inventor and each non-inventor applicant (e.g., assignee-applicant) must separately meet the requirements under 37 CFR 1.29(a)(1)-(4), it would not be appropriate to file a micro entity certification under 37 CFR 1.29(a) for the application if there were more than one applicant or inventor and not all of the applicants and inventors qualified as micro entities under 35 U.S.C. 123(a).“
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To establish micro entity status based on an institution of higher education, an applicant must meet two main requirements:
- Qualify as a small entity as defined in 37 CFR 1.27
- Meet one of the following criteria:
- The applicant’s employer, from which they obtain the majority of their income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is under an obligation to assign, grant, or convey, a license or other ownership interest in the application to such an institution of higher education.
As stated in MPEP 509.04(b): “An applicant for micro entity status under the ‘institution of higher education’ basis set forth in 37 CFR 1.29(d) must satisfy two requirements.”
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What are the income limitations for qualifying as a micro entity?
To qualify as a micro entity based on income, an applicant’s gross income in the previous calendar year must not exceed three times the median household income as reported by the Bureau of the Census. The MPEP states:
“The income limit is not described in terms of a specific dollar amount because median household income may change from year to year.” (MPEP 509.04(a))
For the most current income threshold, applicants should check the USPTO’s website or consult with a patent attorney. It’s important to note that this limit applies to each applicant, inventor, and joint inventor who is named in the application.
To learn more:
What are the income limitations for micro entity status?
To qualify for micro entity status, an applicant’s income must not exceed three times the median household income as reported by the Bureau of the Census. According to USPTO’s 2022 notice, the income limit is $206,109. The MPEP states:
“[A]n applicant qualifies as a micro entity if the applicant’s gross income in the previous calendar year does not exceed the ‘maximum qualifying gross income’ which is set to three times the median household income as reported by the Bureau of the Census.” (MPEP 509.04(a))
It’s important to note that this limit is subject to change, and applicants should check the latest USPTO notices for the most current information.
To learn more:
Micro entity status, once properly established, generally remains in effect until:
- A fee is paid in the small entity or undiscounted amount
- A notification of loss of entitlement to micro entity status is filed
- The issue fee or a maintenance fee is due
However, the applicant has a continued obligation to verify eligibility for micro entity status each time a fee is paid. As stated in 37 CFR 1.29(g): ‘a fee may be paid in the micro entity amount only if status as a micro entity as defined in paragraph (a) or (d) of this section is appropriate on the date the fee is being paid.’
The gross income limit for micro entity status is determined as follows:
- It is set at three times the median household income for the preceding calendar year, as reported by the Bureau of the Census.
- The USPTO publishes the current maximum qualifying gross income on their website.
- This limit applies to each applicant, inventor, and joint inventor individually.
The MPEP clarifies: “At the time any fee is to be paid in the micro entity amount, it is required that no inventor and no non-inventor applicant (if any) have a preceding calendar year’s gross income exceeding the ‘maximum qualifying gross income’ posted on the USPTO website.“
It’s important to note that gross income means total income, not adjusted gross income. The MPEP states: “‘Gross income’ and ‘adjusted gross income’ are not the same thing. Adjusted gross income is defined as gross income minus adjustments to income. For purposes of micro entity status it is ‘gross income’ – not ‘adjusted gross income’ that matters.“
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The deficiency owed for micro entity fee errors is calculated according to 37 CFR 1.29(k)(2). The MPEP states:
The deficiency owed for each previous fee erroneously paid as a micro entity is the difference between the current fee amount for a small entity or non-small entity, as applicable, on the date the deficiency is paid in full and the amount of the previous erroneous micro entity fee payment.
To calculate the total deficiency payment:
- Determine the current fee amount for each erroneously paid fee (small or non-small entity rate)
- Subtract the micro entity fee amount previously paid
- Sum up all individual deficiency amounts
This calculation ensures that the correct fee amount is paid based on the entity status and current fee schedule.
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For micro entity status, gross income is determined as follows:
- Based on the calendar year preceding the year a fee is paid
- Uses the definition of gross income in section 61(a) of the Internal Revenue Code
- Compared to three times the median household income as reported by the Bureau of the Census
- For non-US income, converted using the average currency exchange rate for the relevant calendar year
The USPTO website provides the current maximum qualifying gross income limit.
When calculating gross income for micro entity status involving foreign currency, the USPTO provides specific guidelines:
- If an applicant’s, inventor’s, or entity’s gross income in the preceding calendar year is not in U.S. dollars, the average currency exchange rate reported by the Internal Revenue Service (IRS) for that calendar year must be used for conversion.
- For income received partially in U.S. dollars and partially in foreign currency, the foreign portion must be converted to U.S. dollars and added to the U.S. dollar amount.
The MPEP states: “If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in 37 CFR 1.29(a)(3) or (a)(4).“
The IRS provides yearly average currency exchange rates on its website, which should be used for these calculations.
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An ‘institution of higher education’ for micro entity status purposes is defined according to Section 101(a) of the Higher Education Act of 1965. The key criteria include:
- Located in any U.S. state or territory
- Admits students with secondary education or equivalent
- Authorized to provide post-secondary education
- Offers bachelor’s degrees or at least 2-year programs toward such degrees
- Is a public or non-profit institution
- Is accredited or pre-accredited by a recognized agency
As stated in MPEP 509.04(b): “Section 101(a) of the Higher Education Act of 1965 defines what is meant by ‘institution of higher education’ in the context of 37 CFR 1.29(d).”
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The application filing limit for micro entity status works as follows:
- An applicant must not have been named as an inventor on more than 4 previously filed patent applications
- This limit excludes provisional applications, foreign applications, and PCT applications where the basic national fee was not paid
- Applications filed as a result of previous employment where rights were assigned don’t count towards the limit
MPEP 509.04(a) clarifies: ‘It does not matter how long ago the previous applications were filed or whether the previously filed applications are pending, patented, or abandoned; they are still included when counting to determine whether the application filing limit has been reached.’
How does licensing affect micro entity status eligibility?
Licensing can significantly impact an applicant’s eligibility for micro entity status. According to the MPEP:
“The applicant has not assigned, granted, or conveyed, nor is under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census.”
This means that if you’ve licensed or are obligated to license your application to a high-income entity (exceeding 3 times the median household income), you may not be eligible for micro entity status. It’s crucial to consider any existing or potential licensing agreements when determining your eligibility.
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How does employment at an institution of higher education affect micro entity status?
Employment at an institution of higher education can provide a pathway to micro entity status. The MPEP states:
“A micro entity shall also include an applicant who certifies that: (1) The applicant’s employer, from which the applicant obtains the majority of the applicant’s income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); or (2) The applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular application to such an institution of higher education.” (MPEP 509.04(d))
This means that if you are employed by a qualifying institution of higher education and receive the majority of your income from it, or if you have assigned or are obligated to assign your rights in the application to such an institution, you may be eligible for micro entity status. This provision can be particularly beneficial for academic researchers and inventors.
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How does employment affect micro entity status for inventors?
An inventor’s employment can significantly impact their eligibility for micro entity status. The MPEP provides specific guidelines:
“[A]n applicant is not considered to be named on more than four previously filed patent applications if the applicant has assigned, or is under an obligation to assign, all ownership rights in the applications as the result of the applicant’s previous employment.” (MPEP 509.04(a))
This means that if an inventor has previously filed patent applications as part of their job, and they have assigned or are obligated to assign the rights to their employer, these applications don’t count towards the four-application limit for micro entity status. However, it’s crucial to note that:
- The inventor must not be currently named as an inventor on more than four non-provisional patent applications.
- The inventor’s current employer must not be considered a non-micro entity.
Inventors should carefully evaluate their employment situation and patent history when determining their eligibility for micro entity status.
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Assigning ownership rights can significantly affect micro entity status. The MPEP provides the following guidance:
- An applicant is disqualified from micro entity status if they transfer, or are obligated to transfer, any ownership interest to an entity that exceeds the gross income limit.
- If an inventor assigns all rights to an employer that exceeds the gross income limit, micro entity status cannot be claimed.
- Even if rights are later transferred back to the inventor or to another person who doesn’t exceed the gross income limit, micro entity status cannot be regained.
The MPEP states: “Once an assignee or licensee exceeding the gross income limit receives the ownership interest, the 37 CFR 1.29(a)(4) certification requirement can no longer be met – even if the assignee or licensee retransfers rights and no longer holds any ownership interest in the application.“
It’s important to note that this applies to both actual transfers and obligations to transfer ownership rights.
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To certify micro entity status, you must file a certification form with the USPTO. The USPTO provides two forms:
- Form PTO/SB/15A for certifying under the gross income basis
- Form PTO/SB/15B for certifying under the institution of higher education basis
The certification must be signed by an authorized party as defined in 37 CFR 1.33(b). It should be filed prior to or at the time of paying the first fee as a micro entity.
To correct an error in micro entity status, you need to follow the procedure outlined in 37 CFR 1.29(k). This involves:
- Submitting a separate deficiency payment for each application or patent
- Providing an itemization of the total deficiency payment
- Paying the deficiency owed
The MPEP states: 37 CFR 1.29(k) contains provisions for a micro entity that correspond to the provisions of 37 CFR 1.28(c) for a small entity.
This means the process is similar to correcting small entity status errors.
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Yes, submitting a deficiency payment for micro entity fee errors affects your micro entity status. According to 37 CFR 1.29(k)(4):
Any deficiency payment (based on a previous erroneous payment of a micro entity fee) submitted under this paragraph will be treated as a notification of a loss of entitlement to micro entity status under paragraph (i) of this section.
This means that by submitting a deficiency payment, you are effectively notifying the USPTO that you are no longer entitled to micro entity status. After making the deficiency payment, you will need to pay fees at the small entity or non-small entity rate, as applicable, unless you file a new certification of micro entity status.
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No, you cannot correct micro entity status errors for multiple applications or patents in a single submission. The MPEP, citing 37 CFR 1.29(k)(1), states:
Any paper submitted under this paragraph must be limited to the deficiency payment (all fees paid in error) required for a single application or patent. Where more than one application or patent is involved, separate submissions of deficiency payments are required for each application or patent (see § 1.4(b)).
This means you must submit separate deficiency payments and itemizations for each application or patent where micro entity fees were erroneously paid. This requirement ensures clear and accurate processing of fee corrections for each individual case.
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Yes, foreign applicants can qualify for micro entity status if they meet all the requirements. The USPTO states in MPEP 509.04(a):
Small entities may claim reduced fees regardless of the country in which they are located. There is no restriction requiring that the person, small business concern, or nonprofit organization be located in the United States.
For applicants with income in foreign currency, 37 CFR 1.29(c) specifies: ‘If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in paragraph (a)(3) or (4) of this section.’
Can an applicant with a license agreement qualify for micro entity status?
Yes, an applicant with a license agreement can potentially qualify for micro entity status, but there are specific conditions that must be met. The MPEP provides guidance on this:
“An applicant is not considered to have been named on a previously filed application if the applicant has assigned, or is under an obligation to assign, all ownership rights in the application as the result of the applicant’s previous employment.” (MPEP 509.04(a))
However, it’s important to note that:
- The license agreement must not transfer all substantial rights in the invention to a non-micro entity.
- If the licensee is not a micro entity, the applicant may lose their micro entity status.
- The applicant must still meet all other micro entity criteria, including income limitations and the four-application limit.
Applicants with license agreements should carefully review the terms of their agreements and consult with a patent attorney to determine if they still qualify for micro entity status.
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Can an applicant claim micro entity status based on income from a foreign country?
Yes, an applicant can claim micro entity status based on income from a foreign country. The MPEP clarifies:
“For purposes of qualifying for micro entity status based on the gross income limit, the gross income in the foreign currency must be converted into United States dollars at the exchange rate in effect on the date the micro entity certification is filed.”
This means that if you’re an applicant from a foreign country, you can still qualify for micro entity status if your income, when converted to U.S. dollars, does not exceed the gross income limit. It’s important to use the correct exchange rate on the date of filing your micro entity certification to ensure accurate calculation.
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Can a small business qualify for micro entity status?
Yes, a small business can potentially qualify for micro entity status, but there are specific requirements to meet. The MPEP outlines two main paths for small businesses:
- Income-based qualification: If the small business’s income does not exceed three times the median household income in the preceding calendar year, it may qualify.
- Institution of higher education qualification: If the small business has assigned, granted, conveyed, or is under obligation to assign, grant, or convey a license or other ownership interest in the application to an institution of higher education.
The MPEP states:
“An applicant that qualifies as a micro entity under either the gross income basis or the institution of higher education basis can file a certification of micro entity status on either basis (but not both).”
It’s important to note that all parties involved (applicants, inventors, and joint inventors) must meet the requirements. For more details, refer to MPEP 509.04.
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Are there any fee reductions or waivers available for USPTO patent fees?
Yes, the USPTO offers fee reductions for certain applicants. According to MPEP 509, “Certain fees may be reduced if the applicant qualifies as a small entity or micro entity.” Here’s a brief overview:
- Small Entity: Individuals, small businesses, and nonprofit organizations may qualify for a 50% fee reduction.
- Micro Entity: Certain applicants may qualify for a 75% fee reduction if they meet specific income and filing requirements.
To determine if you qualify and for detailed information on how to claim these statuses, refer to MPEP 509.02 for Small Entity Status and MPEP 509.04 for Micro Entity Status. Always ensure you meet all requirements before claiming a reduced fee status.
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Are there any fee reductions available for small entities or micro entities filing patent applications?
Yes, the USPTO offers significant fee reductions for small entities and micro entities. According to MPEP 607:
“Fees for a nonprovisional application for an original patent are reduced by 50% for a small entity and by 75% for a micro entity.”
To qualify for these reductions:
- Small Entity: Generally includes independent inventors, small businesses with fewer than 500 employees, and nonprofit organizations.
- Micro Entity: Must meet small entity requirements plus additional criteria related to application filings and income.
To claim these statuses, you must file the appropriate certification with your application. For detailed eligibility requirements and how to claim these statuses, refer to USPTO’s Micro Entity Guidance and Small Entity Status information.
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Patent Procedure (35)
For the purpose of micro entity status, the following types of patent applications count towards the application filing limit:
- Previously filed U.S. nonprovisional applications (utility, design, plant, continuation, and divisional)
- Previously filed U.S. reissue applications
- Previously filed U.S. national stage applications under the Patent Cooperation Treaty (PCT)
- Previously filed international design applications under the Hague agreement that designate the U.S.
The MPEP states: “All such applications naming the inventor or a joint inventor are counted toward the application filing limit, whether the applications were filed before, on, or after March 19, 2013.“
Applications that do not count towards the limit include:
- Foreign applications
- International (PCT) applications for which the basic U.S. national stage filing fee was not paid
- Provisional applications
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What is the limit on the number of previously filed patent applications for micro entity status?
For micro entity status, an applicant must not have been named as an inventor on more than four previously filed patent applications. The MPEP states:
“The applicant has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111(b), or international applications for which the basic national fee under 35 U.S.C. 41(a) was not paid.”
This limit helps ensure that micro entity status is reserved for truly small-scale inventors or businesses. It’s important to note that certain types of applications, such as provisional applications and international applications where the basic national fee wasn’t paid, don’t count towards this limit.
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The institution of higher education basis allows applicants to qualify for micro entity status if:
- The applicant’s employer, from which the applicant obtains the majority of their income, is an institution of higher education as defined in the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is obligated to assign, grant or convey, a license or ownership interest in the application to such an institution of higher education.
The applicant must also qualify as a small entity. This basis is implemented in 37 CFR 1.29(d).
According to 37 CFR 1.29(k)(1), the itemization for a micro entity fee deficiency payment must include:
- Each type of fee erroneously paid as a micro entity
- The current fee amount for a small or non-small entity
- The micro entity fee actually paid and the date of payment
- The deficiency owed amount for each fee
- The total deficiency payment owed
The MPEP specifies: The paper must contain an itemization of the total deficiency payment and include the following information: (1) each particular type of fee that was erroneously paid as a micro entity, (e.g., basic statutory filing fee, two-month extension of time fee) along with the current fee amount for a small or non-small entity; (2) the micro entity fee actually paid, and the date on which it was paid; (3) the deficiency owed amount (for each fee erroneously paid); and (4) the total deficiency payment owed, which is the sum or total of the individual deficiency owed amounts.
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What happens if I lose micro entity status during the patent process?
If you lose micro entity status during the patent process, you must notify the USPTO promptly. The MPEP states:
“A micro entity that no longer meets the requirements for micro entity status at a point in time when a fee is due is treated as a small entity for purposes of paying the fee if the applicant or patentee is otherwise eligible for small entity status.”
This means:
- You must file a notification of loss of entitlement to micro entity status.
- If you still qualify as a small entity, you can pay fees at the small entity rate.
- If you no longer qualify as a small entity, you must pay fees at the standard (large entity) rate.
It’s important to note that continuing to pay fees at the micro entity rate when you no longer qualify can result in the patent being held unenforceable. For more details, refer to MPEP 509.04(e).
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If you lose entitlement to micro entity status, you must:
- File a notification of loss of entitlement to micro entity status in the application or patent
- Pay the required fee in the small entity or undiscounted amount, as appropriate
The notification must be filed prior to or at the time of paying the earliest fee after the date on which status as a micro entity is no longer appropriate. As stated in 37 CFR 1.29(i): ‘Payment of a fee in other than the micro entity amount is not sufficient notification that micro entity status is no longer appropriate.’
If you fail to comply with the requirements for correcting micro entity status errors, as outlined in 37 CFR 1.29(k)(1) and (k)(2), the USPTO has two options:
- Treat it as an authorization to process the deficiency payment and charge a processing fee
- Require compliance within a non-extendable one-month period
The MPEP states: If the requirements of paragraphs (k)(1) and (2) of this section are not complied with, such failure will either be treated at the option of the Office as an authorization for the Office to process the deficiency payment and charge the processing fee set forth in § 1.17(i), or result in a requirement for compliance within a one-month time period that is not extendable under § 1.136(a) to avoid the return of the fee deficiency payment.
It’s important to carefully follow the requirements to avoid additional fees or potential loss of rights.
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Micro entities receive a 75% reduction on many USPTO fees, including:
- Filing fees (nonprovisional and provisional)
- Search fees
- Examination fees
- Issue fees
- Appeal fees
- Maintenance fees
- Patent Trial and Appeal Board fees
The micro entity discount applies to most fees ‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.’
Improperly claiming micro entity status can have serious consequences:
- It may be considered fraud on the USPTO if done knowingly
- It can result in the patent being held unenforceable
- Improperly paid fees will need to be corrected, which may include late fees
MPEP 509.04 warns: ‘Any attempt to fraudulently establish status as a micro entity, or pay fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office. Improperly, and with intent to deceive, establishing status as a micro entity, or paying fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office.’
To qualify for micro entity status, an applicant must meet the following requirements:
- Qualify as a small entity
- Not be named as an inventor on more than 4 previously filed patent applications
- Not have a gross income exceeding 3 times the median household income in the previous calendar year
- Not have assigned, licensed, or be obligated to assign or license rights to an entity that exceeds the gross income limit
Alternatively, an applicant can qualify if they are employed by or have assigned rights to an institution of higher education.
To establish micro entity status on the gross income basis, an applicant must meet the following requirements as outlined in 37 CFR 1.29(a)(1)-(4):
- Qualify as a small entity
- Not have been named as an inventor on more than four previously filed patent applications
- Not have a gross income exceeding three times the median household income in the preceding calendar year
- Not have assigned, granted, or conveyed, and not be under an obligation to do so, a license or ownership interest to an entity exceeding the gross income limit
The MPEP states: “Because each inventor and each non-inventor applicant (e.g., assignee-applicant) must separately meet the requirements under 37 CFR 1.29(a)(1)-(4), it would not be appropriate to file a micro entity certification under 37 CFR 1.29(a) for the application if there were more than one applicant or inventor and not all of the applicants and inventors qualified as micro entities under 35 U.S.C. 123(a).“
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To establish micro entity status based on an institution of higher education, an applicant must meet two main requirements:
- Qualify as a small entity as defined in 37 CFR 1.27
- Meet one of the following criteria:
- The applicant’s employer, from which they obtain the majority of their income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965, or
- The applicant has assigned, granted, conveyed, or is under an obligation to assign, grant, or convey, a license or other ownership interest in the application to such an institution of higher education.
As stated in MPEP 509.04(b): “An applicant for micro entity status under the ‘institution of higher education’ basis set forth in 37 CFR 1.29(d) must satisfy two requirements.”
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What are the income limitations for qualifying as a micro entity?
To qualify as a micro entity based on income, an applicant’s gross income in the previous calendar year must not exceed three times the median household income as reported by the Bureau of the Census. The MPEP states:
“The income limit is not described in terms of a specific dollar amount because median household income may change from year to year.” (MPEP 509.04(a))
For the most current income threshold, applicants should check the USPTO’s website or consult with a patent attorney. It’s important to note that this limit applies to each applicant, inventor, and joint inventor who is named in the application.
To learn more:
What are the income limitations for micro entity status?
To qualify for micro entity status, an applicant’s income must not exceed three times the median household income as reported by the Bureau of the Census. According to USPTO’s 2022 notice, the income limit is $206,109. The MPEP states:
“[A]n applicant qualifies as a micro entity if the applicant’s gross income in the previous calendar year does not exceed the ‘maximum qualifying gross income’ which is set to three times the median household income as reported by the Bureau of the Census.” (MPEP 509.04(a))
It’s important to note that this limit is subject to change, and applicants should check the latest USPTO notices for the most current information.
To learn more:
Micro entity status, once properly established, generally remains in effect until:
- A fee is paid in the small entity or undiscounted amount
- A notification of loss of entitlement to micro entity status is filed
- The issue fee or a maintenance fee is due
However, the applicant has a continued obligation to verify eligibility for micro entity status each time a fee is paid. As stated in 37 CFR 1.29(g): ‘a fee may be paid in the micro entity amount only if status as a micro entity as defined in paragraph (a) or (d) of this section is appropriate on the date the fee is being paid.’
The gross income limit for micro entity status is determined as follows:
- It is set at three times the median household income for the preceding calendar year, as reported by the Bureau of the Census.
- The USPTO publishes the current maximum qualifying gross income on their website.
- This limit applies to each applicant, inventor, and joint inventor individually.
The MPEP clarifies: “At the time any fee is to be paid in the micro entity amount, it is required that no inventor and no non-inventor applicant (if any) have a preceding calendar year’s gross income exceeding the ‘maximum qualifying gross income’ posted on the USPTO website.“
It’s important to note that gross income means total income, not adjusted gross income. The MPEP states: “‘Gross income’ and ‘adjusted gross income’ are not the same thing. Adjusted gross income is defined as gross income minus adjustments to income. For purposes of micro entity status it is ‘gross income’ – not ‘adjusted gross income’ that matters.“
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The deficiency owed for micro entity fee errors is calculated according to 37 CFR 1.29(k)(2). The MPEP states:
The deficiency owed for each previous fee erroneously paid as a micro entity is the difference between the current fee amount for a small entity or non-small entity, as applicable, on the date the deficiency is paid in full and the amount of the previous erroneous micro entity fee payment.
To calculate the total deficiency payment:
- Determine the current fee amount for each erroneously paid fee (small or non-small entity rate)
- Subtract the micro entity fee amount previously paid
- Sum up all individual deficiency amounts
This calculation ensures that the correct fee amount is paid based on the entity status and current fee schedule.
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For micro entity status, gross income is determined as follows:
- Based on the calendar year preceding the year a fee is paid
- Uses the definition of gross income in section 61(a) of the Internal Revenue Code
- Compared to three times the median household income as reported by the Bureau of the Census
- For non-US income, converted using the average currency exchange rate for the relevant calendar year
The USPTO website provides the current maximum qualifying gross income limit.
When calculating gross income for micro entity status involving foreign currency, the USPTO provides specific guidelines:
- If an applicant’s, inventor’s, or entity’s gross income in the preceding calendar year is not in U.S. dollars, the average currency exchange rate reported by the Internal Revenue Service (IRS) for that calendar year must be used for conversion.
- For income received partially in U.S. dollars and partially in foreign currency, the foreign portion must be converted to U.S. dollars and added to the U.S. dollar amount.
The MPEP states: “If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in 37 CFR 1.29(a)(3) or (a)(4).“
The IRS provides yearly average currency exchange rates on its website, which should be used for these calculations.
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An ‘institution of higher education’ for micro entity status purposes is defined according to Section 101(a) of the Higher Education Act of 1965. The key criteria include:
- Located in any U.S. state or territory
- Admits students with secondary education or equivalent
- Authorized to provide post-secondary education
- Offers bachelor’s degrees or at least 2-year programs toward such degrees
- Is a public or non-profit institution
- Is accredited or pre-accredited by a recognized agency
As stated in MPEP 509.04(b): “Section 101(a) of the Higher Education Act of 1965 defines what is meant by ‘institution of higher education’ in the context of 37 CFR 1.29(d).”
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The application filing limit for micro entity status works as follows:
- An applicant must not have been named as an inventor on more than 4 previously filed patent applications
- This limit excludes provisional applications, foreign applications, and PCT applications where the basic national fee was not paid
- Applications filed as a result of previous employment where rights were assigned don’t count towards the limit
MPEP 509.04(a) clarifies: ‘It does not matter how long ago the previous applications were filed or whether the previously filed applications are pending, patented, or abandoned; they are still included when counting to determine whether the application filing limit has been reached.’
How does licensing affect micro entity status eligibility?
Licensing can significantly impact an applicant’s eligibility for micro entity status. According to the MPEP:
“The applicant has not assigned, granted, or conveyed, nor is under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census.”
This means that if you’ve licensed or are obligated to license your application to a high-income entity (exceeding 3 times the median household income), you may not be eligible for micro entity status. It’s crucial to consider any existing or potential licensing agreements when determining your eligibility.
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How does employment at an institution of higher education affect micro entity status?
Employment at an institution of higher education can provide a pathway to micro entity status. The MPEP states:
“A micro entity shall also include an applicant who certifies that: (1) The applicant’s employer, from which the applicant obtains the majority of the applicant’s income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); or (2) The applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular application to such an institution of higher education.” (MPEP 509.04(d))
This means that if you are employed by a qualifying institution of higher education and receive the majority of your income from it, or if you have assigned or are obligated to assign your rights in the application to such an institution, you may be eligible for micro entity status. This provision can be particularly beneficial for academic researchers and inventors.
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How does employment affect micro entity status for inventors?
An inventor’s employment can significantly impact their eligibility for micro entity status. The MPEP provides specific guidelines:
“[A]n applicant is not considered to be named on more than four previously filed patent applications if the applicant has assigned, or is under an obligation to assign, all ownership rights in the applications as the result of the applicant’s previous employment.” (MPEP 509.04(a))
This means that if an inventor has previously filed patent applications as part of their job, and they have assigned or are obligated to assign the rights to their employer, these applications don’t count towards the four-application limit for micro entity status. However, it’s crucial to note that:
- The inventor must not be currently named as an inventor on more than four non-provisional patent applications.
- The inventor’s current employer must not be considered a non-micro entity.
Inventors should carefully evaluate their employment situation and patent history when determining their eligibility for micro entity status.
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Assigning ownership rights can significantly affect micro entity status. The MPEP provides the following guidance:
- An applicant is disqualified from micro entity status if they transfer, or are obligated to transfer, any ownership interest to an entity that exceeds the gross income limit.
- If an inventor assigns all rights to an employer that exceeds the gross income limit, micro entity status cannot be claimed.
- Even if rights are later transferred back to the inventor or to another person who doesn’t exceed the gross income limit, micro entity status cannot be regained.
The MPEP states: “Once an assignee or licensee exceeding the gross income limit receives the ownership interest, the 37 CFR 1.29(a)(4) certification requirement can no longer be met – even if the assignee or licensee retransfers rights and no longer holds any ownership interest in the application.“
It’s important to note that this applies to both actual transfers and obligations to transfer ownership rights.
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To certify micro entity status, you must file a certification form with the USPTO. The USPTO provides two forms:
- Form PTO/SB/15A for certifying under the gross income basis
- Form PTO/SB/15B for certifying under the institution of higher education basis
The certification must be signed by an authorized party as defined in 37 CFR 1.33(b). It should be filed prior to or at the time of paying the first fee as a micro entity.
To correct an error in micro entity status, you need to follow the procedure outlined in 37 CFR 1.29(k). This involves:
- Submitting a separate deficiency payment for each application or patent
- Providing an itemization of the total deficiency payment
- Paying the deficiency owed
The MPEP states: 37 CFR 1.29(k) contains provisions for a micro entity that correspond to the provisions of 37 CFR 1.28(c) for a small entity.
This means the process is similar to correcting small entity status errors.
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Yes, submitting a deficiency payment for micro entity fee errors affects your micro entity status. According to 37 CFR 1.29(k)(4):
Any deficiency payment (based on a previous erroneous payment of a micro entity fee) submitted under this paragraph will be treated as a notification of a loss of entitlement to micro entity status under paragraph (i) of this section.
This means that by submitting a deficiency payment, you are effectively notifying the USPTO that you are no longer entitled to micro entity status. After making the deficiency payment, you will need to pay fees at the small entity or non-small entity rate, as applicable, unless you file a new certification of micro entity status.
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No, you cannot correct micro entity status errors for multiple applications or patents in a single submission. The MPEP, citing 37 CFR 1.29(k)(1), states:
Any paper submitted under this paragraph must be limited to the deficiency payment (all fees paid in error) required for a single application or patent. Where more than one application or patent is involved, separate submissions of deficiency payments are required for each application or patent (see § 1.4(b)).
This means you must submit separate deficiency payments and itemizations for each application or patent where micro entity fees were erroneously paid. This requirement ensures clear and accurate processing of fee corrections for each individual case.
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Yes, foreign applicants can qualify for micro entity status if they meet all the requirements. The USPTO states in MPEP 509.04(a):
Small entities may claim reduced fees regardless of the country in which they are located. There is no restriction requiring that the person, small business concern, or nonprofit organization be located in the United States.
For applicants with income in foreign currency, 37 CFR 1.29(c) specifies: ‘If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in paragraph (a)(3) or (4) of this section.’
Can an applicant with a license agreement qualify for micro entity status?
Yes, an applicant with a license agreement can potentially qualify for micro entity status, but there are specific conditions that must be met. The MPEP provides guidance on this:
“An applicant is not considered to have been named on a previously filed application if the applicant has assigned, or is under an obligation to assign, all ownership rights in the application as the result of the applicant’s previous employment.” (MPEP 509.04(a))
However, it’s important to note that:
- The license agreement must not transfer all substantial rights in the invention to a non-micro entity.
- If the licensee is not a micro entity, the applicant may lose their micro entity status.
- The applicant must still meet all other micro entity criteria, including income limitations and the four-application limit.
Applicants with license agreements should carefully review the terms of their agreements and consult with a patent attorney to determine if they still qualify for micro entity status.
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Can an applicant claim micro entity status based on income from a foreign country?
Yes, an applicant can claim micro entity status based on income from a foreign country. The MPEP clarifies:
“For purposes of qualifying for micro entity status based on the gross income limit, the gross income in the foreign currency must be converted into United States dollars at the exchange rate in effect on the date the micro entity certification is filed.”
This means that if you’re an applicant from a foreign country, you can still qualify for micro entity status if your income, when converted to U.S. dollars, does not exceed the gross income limit. It’s important to use the correct exchange rate on the date of filing your micro entity certification to ensure accurate calculation.
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Can a small business qualify for micro entity status?
Yes, a small business can potentially qualify for micro entity status, but there are specific requirements to meet. The MPEP outlines two main paths for small businesses:
- Income-based qualification: If the small business’s income does not exceed three times the median household income in the preceding calendar year, it may qualify.
- Institution of higher education qualification: If the small business has assigned, granted, conveyed, or is under obligation to assign, grant, or convey a license or other ownership interest in the application to an institution of higher education.
The MPEP states:
“An applicant that qualifies as a micro entity under either the gross income basis or the institution of higher education basis can file a certification of micro entity status on either basis (but not both).”
It’s important to note that all parties involved (applicants, inventors, and joint inventors) must meet the requirements. For more details, refer to MPEP 509.04.
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Are there any fee reductions or waivers available for USPTO patent fees?
Yes, the USPTO offers fee reductions for certain applicants. According to MPEP 509, “Certain fees may be reduced if the applicant qualifies as a small entity or micro entity.” Here’s a brief overview:
- Small Entity: Individuals, small businesses, and nonprofit organizations may qualify for a 50% fee reduction.
- Micro Entity: Certain applicants may qualify for a 75% fee reduction if they meet specific income and filing requirements.
To determine if you qualify and for detailed information on how to claim these statuses, refer to MPEP 509.02 for Small Entity Status and MPEP 509.04 for Micro Entity Status. Always ensure you meet all requirements before claiming a reduced fee status.
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Are there any fee reductions available for small entities or micro entities filing patent applications?
Yes, the USPTO offers significant fee reductions for small entities and micro entities. According to MPEP 607:
“Fees for a nonprovisional application for an original patent are reduced by 50% for a small entity and by 75% for a micro entity.”
To qualify for these reductions:
- Small Entity: Generally includes independent inventors, small businesses with fewer than 500 employees, and nonprofit organizations.
- Micro Entity: Must meet small entity requirements plus additional criteria related to application filings and income.
To claim these statuses, you must file the appropriate certification with your application. For detailed eligibility requirements and how to claim these statuses, refer to USPTO’s Micro Entity Guidance and Small Entity Status information.
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